Dunlop Tires North America Inc. says a new analysis of California’s replacement tire efficiency regulation shows some consumers could realize substantially less savings than the state has projected — particularly buyers at the lower-priced end of the replacement tire market.

And according to Darren Thomas, president and CEO of Dunlop Tires North America (DTNA), the company intends to continue challenging the regulation’s potential safety implications while preparing tire dealers for the questions they could face when the first phase of the rule takes effect in 2029.

DTNA’s latest analysis looks beyond whether lower rolling resistance can reduce fuel consumption — something the tiremaker says it does not dispute — and instead examines how the engineering changes needed to meet California’s requirements could affect tire price, tread life, cost-per-mile, performance and product availability.

The analysis compares three different replacement tire scenarios — an economy passenger tire, a premium passenger tire and a light truck tire — and arrives at markedly different potential outcomes for each. DTNA stresses that the examples are sensitivity analyses based on possible engineering responses, rather than predictions of what individual tire manufacturers will ultimately do.

The California Energy Commission (CEC) approved the Replacement Tire Efficiency Program on Aug. 17. Phase 1 will begin in 2029, followed by more stringent requirements beginning in 2033. The CEC says the standards will reduce energy use without adversely affecting tire safety or service life. It estimates an incremental cost of $1.50 per tire during Phase 1 and $6.50 per tire during Phase 2. For a typical gasoline-powered vehicle, the agency projects $179 in fuel savings over the life of a set of tires.

DTNA is challenging whether that statewide calculation adequately captures what will happen when manufacturers redesign individual products across the replacement market.

“Tires that are on the marketplace today for consumers have been engineered specifically to accomplish as many objectives as possible ... so to disrupt that is not a trivial conversation. Our goal is to make sure consumers, industry and politicians fully understand the risk” of the California fuel efficiency mandate “without confusion. This is not a trivial issue.”

Economy tire illustrates affordability concern

DTNA’s most dramatic example centers on a common 195/65R15 economy tire.

The company starts with a tire priced at $64.16 and applies an illustrative 21% increase — consisting of a 16% raw-material impact, 3% capital-expenditure recovery and 2% design and engineering cost. That brings the tire’s price to $77.63.

DTNA then models a scenario in which an engineering approach also reduces the tire’s service life by 20%. Under that example, the tire’s cost per mile rises by approximately 51% and the consumer would need 25% more tires to travel the same number of miles.

Applying that lifecycle scenario to the CEC’s modeled fuel benefit reduces the approximately $153 net consumer benefit projected for Phase 2 to about $14 or less, according to DTNA.

That calculation should not be interpreted as DTNA predicting that economy tires will increase 21% in price or lose 20% of their service life. Those are assumptions the tiremaker is using to illustrate how the economics can change depending on the engineering choices manufacturers make.

But DTNA says the example highlights a particular concern for dealers who serve price-sensitive customers.

According to the company’s California market analysis, about 95% of the volume in the 195/65R15 size is tier-four, while approximately 73% of the associated vehicles are model year 2014 or older. That means even relatively modest increases in the price of those tires could disproportionately affect drivers of older vehicles who depend on lower-priced replacement products.

For dealers, that could turn California’s efficiency mandate into an affordability conversation at the sales counter — particularly if a familiar tire changes in price, mileage expectations or availability.

One rule, different outcomes

DTNA’s other two examples reinforce its argument that there may not be one uniform consumer outcome.

In its premium tire example, the company assumes a higher-priced tire can absorb more sophisticated materials and technology while maintaining service life. Under that scenario, approximately $139 of the CEC’s modeled net consumer benefit remains.

Its light truck example moves in another direction. DTNA says increasing tread depth sufficiently to qualify a product for one of the regulation’s exclusions could potentially improve tire cost per mile, but the excluded tire would no longer be required to deliver the rolling-resistance improvement the regulation is intended to produce.

That possibility is especially relevant to tire dealers because replacement tires are selected for more than fuel efficiency. Customers may prioritize mileage, towing capability, off-road performance, wet traction, snow performance, price or other characteristics depending on how they use their vehicle.

DTNA argues that manufacturers will have multiple potential paths to compliance, including new compounds and materials, casing and sidewall changes, weight reduction, reduced starting tread depth or combinations of those approaches. Some products could instead be designed to qualify for exclusions.

Each approach, DTNA says, creates a different set of potential costs and tradeoffs.

The CEC has reached a different conclusion from its testing. The commission says it evaluated popular replacement tires and industry data and found that compliant products can be cost-effective without compromising safety, tire life or other characteristics. The CEC also says qualifying tires already exist in the market and manufacturers have several years to redesign other products before the program is fully implemented.

Dunlop says safety remains central

Thomas told MTD that DTNA intends to continue pressing the CEC on those differences.

“So first, we're going to fight” the ruling “in terms of safety. There is still time for (the CEC) to reconsider. There are very few moments in time where a product or a subject touches all consumers simultaneously. This is one of those moments.”

DTNA says rolling resistance cannot be evaluated separately from wet and worn-wet performance, hydroplaning resistance, tread life, durability, handling, ride, noise, snow performance and other characteristics tire engineers balance during product development.

The tiremaker’s newest analysis also calls particular attention to the fact that California’s requirements evaluate the rolling resistance of a new tire, while consumers use that tire throughout its entire service life.

DTNA argues that if one compliance strategy reduces starting tread depth and causes a tire to reach replacement depth sooner, consumers could end up buying tires more frequently. That, in turn, could affect both the consumer economics and the environmental impact of the regulation.

Dunlop points dealers toward tire pressure

DTNA is also renewing an argument that tire dealers can act on immediately: maintaining proper inflation pressure.

The company modeled a hypothetical California fleet operating an average of 5 psi below vehicle placard pressure and calculated the potential efficiency benefit if those tires were restored to the proper pressure.

DTNA is not claiming California vehicles are currently 5 psi underinflated. Instead, it uses the figure as a reference point and says California should measure the inflation condition of the current fleet.

Under DTNA’s hypothetical 5-psi scenario, correcting inflation pressure would represent a modeled gross fuel, energy and CO2 opportunity roughly half the size of the CEC’s headline rolling-resistance benefit — without requiring changes to tire construction, tread depth or purchase price.

The company says the comparison is not intended to show that tire-pressure maintenance could replace the replacement tire regulation. Instead, DTNA argues that it represents another efficiency opportunity that should be measured using a similar analytical standard.

For tire dealers, the distinction is notable: inflation pressure is something they can address with tires already in service, regardless of whether those tires fall under California’s replacement tire program.

Dealers will have to explain what changes

MTD previously reported that DTNA expects tire dealers to occupy a central role as the regulation moves toward implementation.

“Retailers better be educated on the subject of low-rolling resistance tires,” Thomas said during an earlier DTNA webinar. “A retailer may have to explain why a certain tire isn’t available in California. Most consumers aren’t even going to be interested in this conversation until the day they need to replace their tires. That retailer will be at the front of that conversation.”

The Tire Industry Association also has worked to reduce some of the regulatory burden on dealers. TIA previously told MTD that showroom educational requirements were removed from the regulation and that the final rule applies to the sale of new tires. According to TIA, that means a dealer cannot be penalized for installing a tire a consumer purchased elsewhere.

But dealers may still have to explain why products have changed, why a particular tire is no longer available, why a replacement costs more or how a tire’s expected mileage and efficiency compare with other options.

DTNA says it plans to help them do that.

The company will add California Replacement Tire Efficiency curriculum to Dunlop Academy. Training will cover rolling resistance, tread depth and tire life, wet and worn-wet performance, hydroplaning, tire pressure and TPMS, regulatory exclusions and lifecycle tire economics.

DTNA also plans consumer-facing tools designed to help dealers compare purchase price, expected mileage, cost per mile, estimated fuel savings and possible performance implications.

“California has made its decision. Now our responsibility is to help dealers and consumers understand what it means in the real world,” Thomas said in DTNA’s latest release. “The tire dealer will be standing across the counter explaining what changed, what it costs and what the consumer is getting for the money.”

DTNA says it will announce its first California-specific Dunlop Academy training sessions and consumer resources as implementation planning moves forward.